Shares of Cemex (CX) were climbing over 3% during midday trading on Tuesday after Morgan Stanley upgraded the stock to "Overweight" from "Equal Weight" with a price target of $11.
Morgan Stanley analysts Nikolaj Lippmann and Lillian Starke argue three main reasons for the upgrade today.
The first is that Cemex is deleveraging and could recover investment-grade status by late this year or in 2018.
Second, the risks to the peso have subsided.
Finally, hopes for a large infrastructure spending package and recovery of drilling activity in the U.S. should come as "option value" for the company.